Petrol is a difficult expense to budget for, since its price fluctuates often. To make your budget more stable (and save some cash along the way), make petrol a set expense. When the actual cost is lower than that, save the rest.
As personal finance blog Money Beagle points out, petrol prices have been on a steady (but probably temporary) decline recently. At the moment, the Australian average is around $1.32 per litre. So, for example, if you set your budget at $1.50, you could save $9 filling up a 50-litre tank. This isn’t a massive chunk of change you’re likely to miss too much, and you can either put it in savings, or put it to some other good use:
The idea behind charging yourself more is that you take the $17 and apply it to something that won’t hurt you once that money returns to paying for gas once the price goes back up. What are some of the things you can do with it? I’m glad you asked!
- Apply it toward debt — If you’ve got credit card debt or other debt, apply the extra money to that amount.
- Save up for something — If you’re debt free, then save the money up. You can save toward an emergency fund, or a travel fund, or something else where savings will come in handy, but that won’t negatively impact you once the savings opportunity goes away.
- Give — You can give the extra money to your favourite charitable organisation. I’m sure they would appreciate the extra funds for a while.
Of course, some day the price of petrol is probably going to exceed your budget and you’ll have to adjust. However, if you give yourself a decent buffer, you can both save a good amount of money and stabilise your budget for the near future.
Why You Should Pretend Gas Is Still $US4 Per Gallon [Money Beagle via Rockstar Finance]